A government of property developers and landlords cannot solve the housing crisis

Becka Hudson writes that the politicians charged with solving the housing crisis are in the pockets of the landlords and property developers who directly profit from it.

July 9, 2018
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8 min read

Park Hill Estate, Sheffield.

The myriad of urgent difficulties around where (and how) people in the UK live – from homelessness, estate demolition and revenge evictions to dangerous conditions and extortionate rent – are together called ‘the housing crisis’. Its symptoms show no signs of abetting. Rough sleeper numbers rise year on year, households are living in unsuitable and sometimes dangerous temporary accommodation in record numbers (many for over a decade), rents raid huge portions of people’s pay each month and 100 tenants a day lose their homes.

In London, where the crisis is diagnosed as the most acute, politicians’ hot air over the issue is evidenced in imposing and ever-multiplying ‘ghost towers’, stacks of homes-as-surrogate-bank-accounts that languish over scores rough sleepers below. How is it, then, that an issue over which their appears to be parliamentary and public consensus continues to grow in scale, urgency and horror?

Thatcher shattered post-war understanding of housing as a collective good by declaring her dream of a ‘nation of homeowners’ and introducing the ‘Right to Buy’. Since then, housing inequality has grown. Successive governments have made grand declarations over their own brand of ‘solution’ for this crisis, yet each remedy seems to deepen existing fault lines. Recent offerings include George Osborne’s 2013 flagship ‘Help to Buy’ scheme, purportedly designed to ‘open the door to home ownership’ to first-time buyers. The scheme was extended by Philip Hammond last year, despite evidence that it mostly subsidises developers. Rather than alleviate pressure on the housing market, these subsidies have inflated prices, flooded developers profits and given just a handful of well off first-time buyers, and existing homeowners, the chance to buy homes. Similarly, starter home schemes have been shown to be only accessible to those on higher incomes – excluding those most affected by the housing crisis and, once again, inflating prices.

Our current Prime Minister announced her own ‘tough’ take on the crisis in recent months, insisting it was land-banking developers’ who were to blame. She announced a rewriting of planning laws, encouraging developers to ‘do their duty’ and build homes. Absent from this was any indication of what kind of homes she was encouraging developers to build, for whom, and how they would be made accessible to the millions of people in housing need. For all the talk of land-banking and the attendant diagnosis of ‘supply and demand’ as the core of the UK housing crisis, London’s ghost towers serve as a cautionary tale. Building houses does not necessarily provide people who need housing with homes, just people looking to invest and profiteer with commodities. Indeed, May’s move was criticised by senior people in her own party as ‘nonsense’, who instead advocated for councils to build council housing.

All the while, and against a backdrop of mounting inequality, genuinely affordable (a term that itself has lost its meaning since it was expanded to include homes worth 17 times the average UK salary) is being destroyed. Local authorities across the country are pursuing regeneration projects demolishing remaining council housing and erecting luxury, largely private developments in their place.

None of this, of course, makes financial ‘sense’ to the public purse. Subsidising private developers with billions through Help to Buy, or private landlords with £23bn a year in housing benefit, is a huge drain on public finances. Whilst council housing is shown to pay for itself, borrowing caps imposed on local authorities stay in place and local councils continue to sell off land and housing they do own. Indeed, those that benefit from these entrenched divisions- developers, landlords and, increasingly, housing associations – are reporting record profits. Cash for luxury development flows, whilst regeneration mines away at council housing, flogs the land beneath it to the highest bidder and local and national government strip away private rental regulation, letting their self-interest do the rest. As most of us are dispossessed, raided for rent, evicted, shifted from one temporary place to the next and struggle to find anywhere decent to live, there are many for whom this ‘crisis’ is not a crisis at all.

The lack of substantive change on housing is often chalked up to MP’s personal experience never growing up in social housing or, failing that, an arbitrary ideological commitment to a market-run housing system. Its true, of course, that many politicians have little to no experience of housing stress and that – across party lines – a Thatcherite consensus around housing-as-commodity abounds. But this commitment is more than a whimsical affiliation; it is undergirded by an alignment with landlords and developers that discourage and preclude political will to do anything meaningful to tackle the causes of the housing crisis.

For one, almost one in five MPs, including Theresa May and 28% of Conservative MPs, are landlords. Since last year’s election, this number has risen. With such a swathe of MPs subsidising their income with private rents, taking action to curb their own profits from hardly seems appealing. Even at local government level, one in seven councillors in Britain’s rental hotspots are landlords. With the power to decline regulation in the private rental sector, and to encourage more private rental accommodation in their areas, whether councillors calling is ‘public service’, or property becomes an urgent question.

Beyond these direct conflicts in politicians’ role, there is a verifiable revolving door between property profit-making and politics. Recent cases in Haringey and Kensington lay bare the tight-knit network of politicians, officials, developers and lobbyists that seems to preclude meaningful action on housing. That this knotting of interests has become so common, and so overt, points to a need to unpack and draw clear lines between constituents need for safe, affordable, decent housing and the direct interests of those that govern them.

On a larger scale, and particularly post-2008 financial crash, the crisis serves other functions, too. The spiralling market of speculation around housing, even as it is grossly lopsided and flooded with government subsidy, serves as a flimsy crutch to an economy in crisis. Whilst flinging up cheaply-made luxury flats to sit empty worsens the housing situation for most of us, it works to inflate prices and keep a precarious but lucrative market propped up. The bubble, of course, will burst. For the vast majority of us – those of us rough sleeping, having most of our cash taken in rent, living in appalling conditions, being passed from place to place in temporary accommodation – we’ve been living in its ruins for a long time.

Luke Murphy writes that wealth inequality, a poorly functioning housing market, an economy focused on unproductive investment and macroeconomic instability are all negative consequences of our current treatment of land within the UK economy